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To: Lucretius who wrote (3374)	9/25/1998 8:50:00 AM
From: wlheatmoon	Respond to of 14427

FYI from Thestreet.com. Banks are looking f'uggglyyy. Cockroach theroy was the headline. LOL. Euro Markets: European Stocks Feel the Fallout from UBS Warning By Ned Stafford Special to TheStreet.com 9/25/98 8:15 AM ET FRANKFURT -- The placid surface of the past three days was shattered by the devastating blow of the UBS profit warning. Markets this morning were teetering near the edge of panic, with banks in virtual free fall on heavy volumes. UBS plunged as much as 17%, and trading in three major French banks was temporarily halted when they fell limit down. Paribas slid 14%, Societe Generale dropped 11% and Banque National de Paris dipped 10%. The hectic trading activity of this morning had calmed by early afternoon, with markets awaiting Wall Street's opening bell. In Frankfurt, the Xetra DAX was down 111 points, or 2.4%, at 4500, in London the FTSE-100 was down 121, or 2.3%, at 5047, and in Paris the CAC-40 was down 109, or 3.2%, at 3271. UBS warned of third-quarter losses of $717 million from exposure to emerging markets and to U.S. hedge fund Long Term Capital Management. Dresdner Bank also warned of LTCM exposure, and its shares plunged 10%, while Deutsche Bank slid 8%. Markets now are frightened that other hedge funds are in danger of going bust, which could wreak havoc not only on the banking sector, but the entire market. A plethora of other problems from Asia to Russia to Latin America were weighing on investor sentiment. And all signs indicate that European profit forecasts might have to come down -- and hard. Tim Wilson, trader at BNP in Frankfurt, said, "People are afraid, and there is concern that there will be a domino effect of stock selling, that investors are going to flee the market." SAP's, a bellwether for German sentiment, continued its heart-wrenching slide today, and was down as much as 5.7%. Glaxo Wellcome was down 6.9% and Siemens down 5.9%. Money was gushing into the perceived safety of U.S. and German bonds. The long bond was yielding 5.11%. And the dollar continued to weaken against the mark on widespread sentiment that the Fed will cut key rates soon, but that core Europe will not follow. The dollar was at 1.6642 marks, a level that already is cutting deeply into company profits here and is no doubt sounding alarms in boardrooms across Europe. Steep losses on Wall Street yesterday and in Asia overnight -- with the Nikkei down 3.4% -- also contributed to the sense of gloom here. And S&P 500 futures, indicating an ugly open on Wall Street, were sending shivers through Europe. At 7:35 a.m. EDT, futures were down 18.70 points at 1035.10. Tim Harris, European equities strategist at J.P. Morgan in London, said markets got lulled into a false sense of security by rate-cut hopes fueled by comments from Fed chief Alan Greenspan. "I think the market kind of set itself up the past few days that the worst was over," he said. But he believes the market missed the point of why the Fed most likely will cut, which is that economies are slowing and financial contagion is spreading, with risk especially high in Latin America. Concerning Long Term Capital's downfall and the risk of further negative surprises, he said: "We very much hope it was the tip of the iceberg, but it very well might not be."